{"id":7364,"date":"2020-02-18T10:01:08","date_gmt":"2020-02-18T14:01:08","guid":{"rendered":"http:\/\/stateofthenation.co\/?p=7364"},"modified":"2020-02-18T10:01:08","modified_gmt":"2020-02-18T14:01:08","slug":"the-huge-geopolitical-consequences-of-the-chinas-coronavirus-outbreak","status":"publish","type":"post","link":"http:\/\/stateofthenation.co\/?p=7364","title":{"rendered":"The HUGE Geopolitical Consequences of the China’s Coronavirus Outbreak"},"content":{"rendered":"

The Geopolitical Consequences of the Coronavirus Outbreak<\/h1>\n

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Credit: Pixabay<\/p><\/div><\/p>\n

Will China be forced into \u201chibernation\u201d amid the epidemic?<\/h3>\n

By Ridvan Bari Urcosta
\nThe Diplomat<\/p>\n

An outbreak of a novel coronavirus appeared in Wuahn, China just ahead of the Lunar New Year holiday, the period of the largest annual human migration on Earth. What if the most terrible scenarios about the coronavirus come true, and the disease outpaces the measures taken by the international community and China itself? The peak of the new epidemic in China may come in February; with that in mind, let us think about the possible geopolitical and geoeconomic consequences.<\/p>\n

The coronavirus outbreak coincided with an economic slowdown as China contends with rising debt, cooling domestic demand, and aggressive U.S. tariffs. The 6.1 percent GDP growth rate for 2019 was near the bottom of Beijing\u2019s target range, and\u00a0sharply down on the previous year\u2019s 6.6 percent.<\/a>\u00a0On January 15, China and the United States signed an interim trade deal, the first steps toward the end of U.S.-China trade war.\u00a0 But the celebration was short-lived, as just a few days later the severity of the coronavirus began to become clear.<\/p>\n

An Outbreak in China\u2019s Industrial Heartland<\/strong><\/p>\n

Wuhan, the capital of Hubei province, is at the center of the Chinese industrial heartland. Looking at a map, this city is located in the very middle of the \u201cIndustrial Square\u201d of the country, the area bounded by Beijing\/Tianjin, \u00a0Chengdu\/Chongqing, Macau\/Hong Kong, and Shanghai. Hubei province is home to seven crucial economic zones: Hubei Jingzhou Chengnan Economic Development Zone; Wuhan East Lake High-Tech Development Zone (China\u2019s largest production center for optical-electronic products); Wuhan Economic and Technological Development Zone; Wuhan Export Processing Zone; Wuhan Optical Valley (Guanggu) Software Park is in Wuhan East Lake High-Tech Development Zone; and Xiangyang New & Hi-Tech Industrial Development Zone. Wuhan in particular boasts the largest river-port in China and the largest airport of Central China.<\/p>\n

Whereas in the national economy of China saw a growth slowdown in 2019, Wuhan saw higher growth at 7.8 percent. According to the Hubei provincial government, \u201cThe added value of high-tech sectors and digital economy are estimated to\u00a0account for 24.5 percent and 40 percent of the [Wuhan] GDP.<\/a>\u201d Wuhan\u2019s prospects looked bright for 2020 as well. As the Hubei government noted, \u201cOver 300 of the world\u2019s top 500 companies have settled in Wuhan. The number of newly-added high-tech companies hit a record high with a net increase of about 900.\u201d The government work report \u2013 delivered at the 14th Wuhan Municipal People\u2019s Congress, ironically as the outbreak was gaining steam \u2013 estimated that the GDP of Wuhan would grow between 7.5 percent to 7.8 percent in 2020, with 220,000 new jobs created.<\/p>\n

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Just a few weeks after this rosy outlook was given, the terrible pictures from Wuhan seem to many people in the world to be images from Hollywood apocalyptic movies. If the outbreak expands, it could bring the fabric of the global economy to a halt. Beijing has already demonstrated that it is able to mobilize millions of people for the goal of containing the virus and simultaneously isolate millions of others from their families and friends. Hubei province, with a population of 58 million of people, has essentially been cut off from the entire country.<\/p>\n

Compare Wuhan to California or, more precisely, to Silicon Valley and imagine the harm done to the national and global economy if the state was effectively shut down for weeks on end.<\/p>\n

Foreign and International Companies React<\/strong><\/p>\n